Presentation of 2009 Actuarial Valuation Results Systems Administered by Public Employees’ Retirement Board Presented By Stephen McElhaney, FSA October 29, 2009
Discussion Topics • Covered Systems • Historical Trends • 2009 Actuarial Valuation Results • Projections Montana Public Employees Retirement Board 1
PERB Systems System Name June 2009 Assets ($ Millions) Public Employees’ Retirement System $2,999 Judges’ Retirement System 47 Highway Patrol Retirement System 75 Sheriffs’ Retirement System 151 Game Warden’s and Peace Officers’ 62 Retirement System Municipal Police Officers’ Retirement System 162 Firefighters’ United Retirement System 159 Volunteer Firefighters’ Compensation Act 20 2
PERS Historical Trends Assets and Liabilities AAL AAL PV PVFB AV AVA MVA MVA $7, $7,000 000 Millions 84% $6, $6,000 000 90% 88% 95% 85% $5, $5,000 000 87% 100% $4, $4,000 000 125% $3, $3,000 000 $2, $2,000 000 $1,000 $1, 000 $0 $0 0 0 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Montana Public Employees Retirement Board 3
PERS Historical Trends Contributions EE Cont Contri ribu bution on ER Cont Contri ribu bution on St State Cont e Contri ribu bution on ER Rate ER Ra $180 $180 7. 7.20% 20% llions Millio 7. 7.15% 15% $160 $160 7.10% 7. 10% $140 $140 7.05% 7. 05% $120 $120 7.00% 7. 00% $100 $100 6. 6.95% 95% $80 $80 6.90% 6. 90% $60 $60 6.85% 6. 85% $40 $40 6. 6.80% 80% $20 $20 6.75% 6. 75% $0 $0 6.70% 6. 70% 0 0 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Montana Public Employees Retirement Board 4
PERS Historical Trends Participation Ac Actives Te Term Ve Vested Retirees rees Payroll Pay 60,000 60, 000 $1, $1,200 200 Millions 50,000 50, 000 $1,000 $1, 000 40,000 40, 000 $800 $800 30,000 30, 000 $600 $600 20, 20,000 000 $400 $400 10,000 10, 000 $200 $200 0 $0 $0 0 0 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Montana Public Employees Retirement Board 5
PERS Summary of Valuation Results Montana Public Employees’ Retirement System Summary of Principal System Results Valuation as of: June 30, 2008*** June 30, 2009 % Change Participant Counts Active Members 28,293 28,983 2.4% Disabled Members* 290 279 -3.8% Retirees and Beneficiaries* 16,337 16,796 2.8% Terminated Vested Members 2,579 2,476 -4.0% Terminated Non-Vested Members 6,268 5,670 -9.5% Total** 53,767 54,204 0.8% Annual Salaries of Active Members $ 994,314,000 $ 1,053,173,964 5.9% Average Annual Salary $ 35,143 $ 36,338 3.4% Annual Retirement Allowances for Retired $ 185,155,000 $ 201,412,083 8.8% Members and Beneficiaries Assets and Liabilities Actuarial Accrued Liability (AAL) $ 4,504,743,000 $ 4,792,819,291 6.4% Actuarial Value of Assets (AVA) 4,065,307,000 4,002,212,253 -1.6% Unfunded AAL (AVA/AAL) $ 439,436,000 $ 790,607,038 79.9% Less: PCR-UAL 17,500,000 16,188,870 -7.5% Net Unfunded AAL $ 421,936,000 $ 774,418,168 83.5% Funded Ratio 90.25% 83.50% Present Value of Accrued Benefits (PVAB) N/A $ 4,060,778,783 Market Value of Assets $ 3,852,532,000 2,998,626,255 -22.2% Unfunded PVAB N/A $ 1,062,152,528 Accrued Benefit Funding Ratio N/A 73.84% Ratio of Actuarial Value to Market Value 105.52% 133.47% (See following page for footnotes) Montana Public Employees Retirement Board 6
PERS Summary of Valuation Results Montana Public Employees’ Retirement System Summary of Principal System Results Valuation as of: June 30, 2008*** June 30, 2009 % Change Contributions as a Percentage of Payroll Statutory Funding Rate 13.935% 14.070% Less: Transfer to DB Ed Fund 0.040% 0.040% Net Statutory Funding Rate 13.895% 14.030% Normal Cost Rate 12.130% 12.160% Available for Amortization of UAL 1.765% 1.870% Period to Amortize 24.8 years Does not amortize Projected 30-year Level Funding Rate 13.750% 16.420% Projected Shortfall (Surplus) (0.185%) 2.350% * Based on PERA categorization for the annual report. For actuarial valuation purposes, 793 members in 2008 and 784 members in 2009 were valued as disabled members with offsetting reductions to the number of retired members. ** The total number of members processed in the 2009 valuation was 54,130 compared to 54,204 above being used for the annual report. A reconciliation of this difference will appear in the full actuarial valuation report. *** All results reported under heading June 30, 2008 were produced by the prior actuary. Montana Public Employees Retirement Board 7
PERS Projections - Contributions Assuming Statutory Contributions Asset Returns at 8% 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 30% 30 Me Member R Rate Employer er C Cont ntribu bution R Rate GASB SB M Mini nimum 25% 25 20% 20 15% 15 7. 7.13% 13% 7. 7.13% 13% 7. 7.13% 13% 7. 7.13% 13% 7.13% 7. 13% 7. 7.13% 13% 7. 7.13% 13% 7. 7.13% 13% 7. 7.13% 13% 7.13% 7. 13% 7.13% 7. 13% 7. 7.13% 13% 7. 7.13% 13% 7.13% 7. 13% 7. 7.13% 13% 7. 7.13% 13% 10 10% 5% 5% 6.90 90% 6.90% 0% 6. 6.90% 90% 6.90 90% 6.90% 90% 6.90 90% 6.90% 0% 6. 6.90% 90% 6.90 90% 6.90% 0% 6. 6.90% 90% 6.90 90% 6.90% 90% 6.90 90% 6.90% 0% 6. 6.90% 90% 0% 0% Montana Public Employees Retirement Board 8
PERS Projections - Contributions Assuming Statutory Contributions Asset Returns at 9.5% 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 30% 30% Me Member R Rate Employer C Cont ntribu bution R Rate GASB SB M Mini nimum 25% 25% 20% 20% 15% 15% 7. 7.13% 7.13% 3% 7.13% 7. 13% 7.13 7. 13% 7.13% 7.13% 7. 7.13% 3% 7. 7.13 13% 7.13% 7.13% 7.13% 13% 7. 7.13 13% 7.13% 7.13 7. 13% 7.13% 3% 7.13% 13% 10% 10% 5% 5% 6. 6.90% 90% 6.90% 6. 90% 6.90% 6. 90% 6.90% 6. 90% 6. 6.90% 90% 6. 6.90% 90% 6. 6.90% 90% 6.90% 6. 6.90% 90% 6.90% 6. 90% 6.90% 6. 90% 6.90% 6. 90% 6. 6.90% 90% 6. 6.90% 90% 6. 6.90% 90% 6.90% 6. 90% 0% 0% Montana Public Employees Retirement Board 9
PERS Projections - Contributions Assuming Statutory Contributions Asset Returns at 6.5% 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 30% 30% Me Member R Rate Employer C Cont ntribu bution R Rate GA GASB M Minimum 25% 25% 20% 20% 15% 15% 7.13 13% 7.13% 7.13% 7.13% 3% 7. 7.13% 13% 7. 7.13% 13% 7. 7.13 13% 7.13% 7.13 13% 7.13% 3% 7. 7.13% 7.13% 3% 7. 7.13% 13% 7. 7.13 13% 7.13% 7.13 13% 10% 10% 5% 5% 6.90% 90% 6.90% 90% 6.90% 6.90% 0% 6.90 6. 90% 6.90% 6.90 90% 6.90% 90% 6.90% 90% 6.90% 6.90% 0% 6.90% 6. 6.90% 6.90% 90% 6.90% 90% 6.90% 0% 0% Montana Public Employees Retirement Board 10
PERS Projections - Assets and Liabilities Assuming Statutory Contributions Asset Returns at 8% 84% 76% 67% 62% 61% 61% 60% 60% 59% 58% 57% 56% 55% 54% 53% 52% 51% 50% 49% 47% 46% $1 $14 Ac tu tua ria l Lia l Lia bil ility ity AVA AV MV MVA $12 $1 $1 $10 $8 $8 $6 $6 $4 $4 $2 $2 $0 $0 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 25% 25 Montana Public Employees Retirement Board 11
PERS Projections - Assets and Liabilities Assuming Statutory Contributions Asset Returns at 9.5% 84% 76% 68% 63% 64% 64% 65% 65% 66% 66% 66% 67% 67% 67% 68% 68% 69% 69% 70% 70% 71% $14 $14 Ac tu tua ria ia l Lia l Lia bility ility AVA AV MV MVA $12 $12 $10 $10 $8 $8 $6 $6 $4 $4 $2 $2 $0 $0 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 25% 25% Montana Public Employees Retirement Board 12
PERS Projections - Assets and Liabilities Assuming Statutory Contributions Asset Returns at 6.5% 84% 76% 66% 60% 59% 58% 56% 55% 53% 51% 49% 47% 45% 43% 41% 39% 37% 34% 32% 30% 27% $14 $1 Ac tua ria ia l Li l Lia bility AVA AV MVA MV $1 $12 $1 $10 $8 $8 $6 $6 $4 $4 $2 $2 $0 $0 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 30% 30 Montana Public Employees Retirement Board 13
Valuation Results – Other Plans 2008 2009 2008 2009 Funded Ratio Funded Ratio Amortization Amortization Period Period JRS 157% 148% 0.0 0.0 75% 72% 17.4 21.5 HPORS SRS 98% 90% 16.3 Does not amortize 93% 88% 13.0 Does not GWPORS amortize MPORS 65% 62% 18.6 22.1 72% 69% 11.3 12.7 FURS VFCA 84% 81% 5.0 6.8 Montana Public Employees Retirement Board 14
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